Bitcoin as Lifeline Amid Crushing Devaluation, Extreme Poverty, Sectarian Violence in Nigeria

The scrappy citizens of Lagos, Nigeria are traders and can-do survivors almost by nature. Their government, however, has mismanaged the nation’s money to such a degree that it’s prone to wild devaluation swings. And while an argument could be made bitcoin too is volatile, it actually isn’t comparatively. With access to peer-to-peer exchanges such as Localbitcoins, Nigerians are revolutionizing even their traditional outdoor marketplaces, providing a financial oasis in rather dark times.

Lagos, Nigeria Finds Bitcoin is a Way to Hedge Against its Naira

“I can use Bitcoin for anything now […],” Soji, a Lagos web designer told Jeremy Kirshbaum and Pelumi Oguntemehin. “It means I can invest and also pay anybody currently, except old people, I will send them bitcoin. But some people think it is a scam to deal in Bitcoin and they also fear being hacked, as many people do not know how to protect themselves online.” Bitcoin is a handy way for Soji to gain overseas hosting services from vendors who simply won’t accept his country’s native fiat currency, Naira.

Bitcoin gets considerable flack in professional financial circles for its legendary volatility. Wild price swings can for sure occur, and have. However it is no match for Nigeria’s Naira. As Longhash explains, “Silas Okwoche is a self-taught engineer […]. He was the co-founder of a cell phone company called Nerve Mobile, which used Android smart phones from Shenzhen, China. Silas found a Chinese partner via the e-commerce platform Alibaba. Nerve Mobile’s venture was profitable for a time, but ended for a reason that had nothing to do with Silas’s product. The Nigerian Naira fell against the Chinese yuan by over 15%, and the hardware became too expensive. Silas’s story is not exceptional: Nigerian business people struggle with currency volatility every day,” the reporters insist.

“The chart shows the levels of volatility of the Naira, Bitcoin, and Ethereum. At many points the Naira is more volatile than either of the two major cryptocurrencies.”

Nigeria rests on the African continent at its Western curve, hugging the Gulf of Guinea, a click North of the Equator. It’s bordered by four countries to its immediate East, as a kind of horseshoe with only the South Atlantic opening West. Lagos is the largest city in Nigeria, while also boasting being the highest concentrated city in Africa. It is one of the fastest growing cities in the world, according to many estimates. It routinely ranks as the highest in African GDP, acting as a financial center and bustling port. A rather wonderful examination of Lagos can be found in Robert Neuwirth’s presentation, “The power of the informal economy,” though admittedly a bit dated.

Present day sees the broader country as lagging behind even India in extreme poverty, as CNN reports, “Nigeria has overtaken India as the country with the largest number of people living in extreme poverty, with an estimated 87 million Nigerians, or around half of the country’s population, thought to be living on less than $1.90 a day […] In Nigeria, as with other countries on the continent, that figure is projected to rise. ‘By the end of 2018 in Africa as a whole, there will probably be about 3.2 million more people living in extreme poverty than there are today,’” according to researchers. All this, and with being the largest oil producer in Africa…

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